Theory Galore: The system is balanced due to USD vs. SEK value?

[aridash]

Originally Posted by jdegre

well, MA apparently drew a different conclusion than yours, since they stated in their financial reports, in HUGE letters, that their results had been affected VERY adversely by the $/SEK exchange rate.

it was half sarcastic, hence the smiley. yes, it will affect their published results since they have to be made up in SEK. in the UK we see this each year in the multinational UK companies, they remark upon the exchange rates here and there. its a caveat that really means look a little deeper. accountancy practice can make massivly profitable companies, ie Vodafone, look like loss making businesses. if they can use exchange rates to help this, and therefore reduce their tax liability, they will.

[Jimmy B]

Originally Posted by Joat

I had some thoughts about this lately. Since USD is so weak against SEK,
do MA balance system due to this?
They do lose a lot because of this.
Even thou' it's positive for someone from f.ex Sweden to depo, they might
get less depos done in the long run, if people has to lose more, due to weak
USD. (System is balanced so people do lose more, and hopefully depo more.)
I f.ex feel that, even thou' USD is cheap, I lose my PEDs way to fast ATM,
and that makes me think twice before I do another depo. (Even thou' my
depos arn't that big ATM. )
So what do you think? Give me some thoughts.

I guess what it really means is as the $ drops, we play at lower stakes than before.

In terms of money depositted before the decline of the dollar I guess MA haven't lost anything, as its unlikely they'd have been holding it in dollars. So our depositted PED has just dropped in value.

But yes, now many people depositting will be getting more PED for their money and hence may well not need to deposit as much. So to compensate for that I'd imagine MA want people to be turning over PED at a higher rate. The fast L guns, the new fast regenerating mobs, etc, could all be partly as a result of that.

[Hally]

Also this is an obvius reason that MA allows the inflation to run high. If and or when the the $ goes back up we can expect to see alot more nice stuff just as long as it means more deposits.

[Joat]

Originally Posted by onyx oZ Zombie

I honestly can't believe another thread along these same lines has been posted ... PLEASE make an effort to search out one of the other 8 threads on this subject, and add your thoughts to THAT thread instead of creating a new one ... geez

Yep, guess I could have searched for, but at the same time, if thread is "old"
some of those that has something interesting to say might miss my post.
(After some posts I've got replies and PMs both at EF and other places, with
some interesting thoughts. That's what I'm interested to hear, nothing else. )

[Lexxy]

Err... from what I read in MA balance sheet the reason they see an overall decrees in assets (hence a decrease in Owners equity which is the only thing an investor cares about) is due to the large amount of capital held in USD.

Because this value is now falling there overall assets are falling.

The change in the USD really has very little net effect on there sales.

For all the us players 1 USD = 10 PED... and it always will be
For me as a Canadian 1 CND = aprox 10 PED... where as in the past it would have been closer to 9 PED.

So if I put 1 USD in to the game now, where as before I was only putting 0.90 USD into the game, MA assets are actually increasing at a faster rate now then they were then.

I think what most people miss is that MA are not actually money traders... your banks and CC companies are.

The big difference again is with the amount of real assets they hold in USD.

Right now since the dollar is week vs. the SEK there balance sheet looks pretty bad... however if they hold there current investment until the dollar improves then the balance sheet will in fact show a huge improvement, (and the CEO can expect a nice little bonus) when in all actuality in real terms there has be absolutely no change to the company.

Just my 2 PEC
Lexxy

[QuintusMagnus]

Originally Posted by alh

Yeah, they _sales_ did decrease a bit, so the "non-US people will deposit more"-theory doesn't hold.
Their net sales (amount of ped deposited) did increase about 9%, but the $ lost 18% of value, so sales did decrease.
And does ofcourse look bad in the financial report, and has to be mentioned.

But, they still have one positive factor they did not mention, and this is about the money they "guarantee" for the universe. This they claim is the ped value of the universe. This value they have to guarantee, they can't do what they want with, and is a - post on the balance sheet.
But, since they guarantee this in $, the number of SEK (the currency in their balance sheet) has decreased also with 18%.

Since this value is surely a lot greater then this years sales, they have in total gained money.

Then, they have spend a lot of money on R&D and sales, and this is the big - that really affected liquidity, and not the decreased $...

But I'm just an amature, what do I know...

I just think it makes sense

Please prove me wrong if you think I am, I love to be proved wrong, thats how you learn

Once again me and Alh seem to be on the same side of the coin...no matter how valuable people feel said coin is.

In the present market, the world outside of the US is more inclined to be investing in the game, since they can get more peds (dollars) for it, much like how I expect US net exports (outside of oil) to come closer back into balance in the coming years as the world adjusts to the dollar finding its new and proper value (instead of being held high by the high interest rates going up to about the mid/late 1990's). Ergo, people are inclined to invest more (or in the US players' case, the same amount at least) in the game than before, while, since the dollar's low, they are DISinclined to withdraw. Hence the game should be trending now or in the future towards a much higher inflow to outflow ratio, increasing MA's capital. How this manifests itself, I don't know. Is it more loot? Is it more of these version updates since less Euros need to be held to cover the same number of dollars that are supposed to be covered in game? Will MA try to fan the flames of this by causing more decay and worse loot? That sort of question, the "in game market" side, I honestly am not fully sure of, since my experience with PE's economy has been via the economy proper, not so much the loot pool (I'm a trader/miner, not a fighter!).

But as for whether this all hurts MA? Well, whatever the accounting sheets may show, there's very little ECONOMIC reason that I can see for this to be any sort of a severe blow to MA. There's a slim chance they might suffer a bit from the restructuring of the U.S. Dollar, but more likely they're probably getting ready to be able to do much more of the R&D and/or much more of the work on PE-China and other projects that they've been wanting to sink their teeth into. That appears to be the case.